Draft Asian Infrastructure Investment Bank (Immunities and Privileges) Order 2015

George Kerevan Excerpts

Monday 2nd November 2015 General Committees

[George Kerevan (East Lothian) (SNP)]

There is much merit in the project, as others have said, and in the UK having an early involvement in it. In order for the project to fulfil its potential, however, we have to recognise some conflicts of interest, or at least potential ones. The Minister, in his reply to the hon. Member for Harrow West, was not clear enough about his or the Government’s response to that.

The Asian Development Bank, which has been in existence since the 1960s and of which we are a significant member, is funded or capitalised largely from Japan and, in its heyday, was seen mainly as a vehicle for Japan to invest across wider Asia in a positive way. However, it is at least conceivable that in setting up the new Asian Infrastructure Investment Bank the Chinese Government are setting up a rival to the Asian Development Bank, which might get the new bank caught up in the manifest tensions between the Governments of China and Japan in recent years. There is room for more than one bank and China investing some $50 billion to capitalise the project is positive, but it must not become a political football. We need assurances from the Minister that the British Government will use their good offices, even behind the scenes, to ensure that that happens.

The Chinese Government’s explanation for why they are setting up the new bank ties very much to President Xi’s project of a new silk road to strengthen the infrastructure and transport links between Asia and Europe. That is an excellent idea, but those links must not simply end in Germany; they must also reach the UK. What strategy or vision do the Government have to ensure that the bank plays its part in extending the new silk road to the UK?

I do not make my final point tongue in cheek, but the Minister perhaps ought to have words with the Treasury, because it is of course trying to sell off our own Green Investment Bank on the ground that capitalising it will limit the Government’s ability to reduce the deficit. In the same breath as selling a successful green bank which has achieved infrastructure investment in the UK in just the areas we have been discussing, however, the Treasury is providing virtually the same kind of money to be the British contribution to the AIIB. My constituents might find such priorities a little odd—we are closing down the green bank, which has its headquarters in Edinburgh, on cost and deficit grounds, but we can find the money to invest in an infrastructure bank in Asia. Possibly we can do both—that would be my preference—but I want the Minister to reassure me that the Treasury will not come back next week and decide to pull out of the AIIB on cost grounds.